DTN Midday Livestock Comments 01/18 12:50
Gains Sweep Through Hog Futures
Active buyer support quickly moved into the lean hog complex Friday morning.
With spring and summer hog futures posting $2 to $2.70 per cwt gains at midday,
limit market gains are still possible.
By Rick Kment
DTN Analyst
General Comments
Active support has flooded into lean hog futures trade with April through
June contracts posting gains above $2 per cwt. April contracts are flirting
with limit gains with prices currently $2.70 per cwt higher. Cattle trade is
mixed to mostly higher as traders try to cover short positions in front of the
long weekend, as markets will remain closed Monday. Corn markets are higher in
light trade. March corn futures are 1 1/2 cent higher. Stock markets are higher
in light trade. Dow Jones is 283 points higher with Nasdaq up 81 points.
LIVE CATTLE:
Mixed trade is seen late Friday morning as market activity is limited and
most prices have shifted higher in light to moderate activity. There is growing
support in all spring and summer contracts, although gains have been limited to
10 to 40 cents per cwt in most contract months. The overall support through the
market may add firmness to trade when traders move back into the market next
week Tuesday. Cash trade bids are seen in a few areas midmorning with live bids
holding at $122 per cwt while dressed bids are at $195 in Nebraska. This a
moderate pullback from bids earlier in the week, although current bids are
still a long way from asking prices. Even though asking prices are not as firm
as previous days, feedlot managers are likely to be unwilling to ratchet prices
lower at this point. Current asking prices are seen from $127 to $130 live and
$200 and higher dressed. Boxed Beef cut-outs at midday are higher, $1.95 higher
(select) and up $0.37 per cwt (choice) with light movement of 47 total loads
reported (23 loads of choice cuts, 10 loads of select cuts, no loads of
trimmings, 14 loads of ground beef).
FEEDER CATTLE:
Light buyer activity is slowly resurfacing in feeder cattle trade following
the sharp triple-digit losses Thursday. Limited volume is seen through the
morning as traders prepare for the extended weekend, as markets will remain
closed Monday. This move higher is not expected to break away from the previous
pressure and overall weaker tone of the complex, but could help to give some
hope that market stability is being sought by traders Friday.
LEAN HOGS:
Sharp gains have quickly swept through the complex Friday morning following
limited initial trade. Similar to the last couple of trading sessions, it is
expected that overall volume will remain light Friday, but traders may still
focus on increased underlying support through the entire complex. This may add
even more volatility to the complex as April futures are swiftly progressing
toward limit gains with prices currently $2.75 per cwt higher. A close with
limit gains would create even more volatility to the market, allowing expanded
trading limits Tuesday when markets reopen. With an extended gap for traders to
assess market direction over the next couple of days, this may add uncertainty
to the market. Cash prices are higher on the National Direct morning cash hog
report. The weighted average price is up $0.23 at $51.63 per cwt with the range
from $46.00 to $53.00 on 3,527 head reported sold. Cash prices unreported due
to confidentiality on the Iowa/Minnesota Direct morning cash hog report. Pork
carcass values are lower on the morning report with prices slipping $0.51 per
cwt at $69.59 per cwt with 127 loads traded. Lean hog index for 1/16 is $58.18,
up 0.16, with a projected two-day index is unavailable at this time.
Rick Kment can be reached at rick.kment@dtn.com
(CZ)
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